THE RURAL BANK OF LIPA CITY, INC.

, BERNARDO
BAUTISTA, JAIME CUSTODIO, OCTAVIO
KATIGBAK, FRANCISCO CUSTODIO, and JUANITA
BAUTISTA vs. CA, SEC EN BANC, SEC Hearing Officer
ENRIQUE L. FLORES, JR., REYNALDO
VILLANUEVA, SR., AVELINA M. VILLANUEVA,
CATALINO VILLANUEVA, ANDRES GONZALES,
AURORA LACERNA, CELSO LAYGO, EDGARDO
REYES, ALEJANDRA TONOGAN and ELENA USI

FACTS
Private respondent Reynaldo Villanueva, Sr.,
executed a Deed of Assignment, of his shares as
well as those of 8 other shareholders under his
control with a total of 10,467 shares, in favor of
the stockholders of the Bank represented by its
directors Bernardo Bautista, Jaime Custodio and
Octavio
Katigbak.
Sometime
thereafter,
Villanueva and his wife, Avelina, executed an
Agreement where they acknowledged their
indebtedness to the Bank in the amount of
P4,000,000.00 and stipulated that said debt will
be paid out of the proceeds of the sale of their
real property described in the Agreement.
At a meeting of the Board of Directors of the
Bank, the Villanueva spouses assured the Board
that their debt would be paid on or before
December 31 of that same year; otherwise, the
Bank would be entitled to liquidate their
shareholdings, including those under their
control. Should the proceeds of the sale fail to
satisfy in full the obligation, the unpaid balance
shall be secured by other collateral sufficient
therefor.
When the Villanueva spouses failed to settle their
obligation on the due date, the Board sent them a
demand letter. The Villanuevas ignored the banks
demands, whereupon their shares of stock were
converted into Treasury Stocks. Later, the
Villanuevas, through their counsel, questioned
the legality of the conversion of their shares.

sufficient basis for the issuance thereof.

However, a motion for reconsideration was
granted upon finding that since the Villanuevas
have not disposed of their shares, whether
voluntarily or involuntarily, they were still
stockholders entitled to notice of the annual
stockholders meeting was sustained by the SEC.
Accordingly, a writ of preliminary injunction
was issued enjoining the petitioners from acting
as directors and officers of the bank.
With the impending 1995 annual stockholders
meeting only 9 days away, the Villanuevas filed
an Omnibus Motion praying that the said
meeting and election of officers be suspended or
held in abeyance, and that the 1993 Board of
Directors be allowed, in the meantime, to act as
such. 1 day before the scheduled stockholders
meeting, the SEC Hearing Officer granted the
Omnibus Motion by issuing a TRO preventing
petitioners from holding the stockholders
meeting and electing the board of directors and
officers of the Bank.
A petition for Certiorari and Annulment with
Damages was filed by the Rural Bank, its
directors and officers before the SEC en banc.
The SEC en banc denied the petition for
certiorari.
A subsequent motion for reconsideration was
likewise denied by the SEC en banc.
A petition for review was thus filed before the
CA, which affirmed the SEC decision.
Petitioners motion for reconsideration was
likewise denied.
Hence, the instant petition for review.
DECISION
We find no merit in the instant petition.

On January 15, 1994, the stockholders of the

Bank met to elect the new directors and set of
officers for the year 1994. The Villanuevas were
not notified of said meeting. Atty. Amado
Ignacio, counsel for the Villanueva spouses,
questioned the legality of the said stockholders
meeting and the validity of all the proceedings.
In reply, the new set of officers of the Bank
informed Atty. Ignacio that the Villanuevas were
no longer entitled to notice of the said meeting
since they had relinquished their rights as
stockholders in favor of the Bank.

We have uniformly held that for a valid transfer

of stocks, there must be strict compliance with
the mode of transfer prescribed by law. The
requirements are: (a) There must be delivery of
the stock certificate; (b) The certificate must be
endorsed by the owner or his attorney-in-fact or
other persons legally authorized to make the
transfer; and (c) To be valid against third parties,
the transfer must be recorded in the books of the
corporation. As it is, compliance with any of
these requisites has not been clearly and
sufficiently shown.

The Villanueva spouses filed with the SEC a

petition for annulment of the stockholders
meeting and election of directors and officers,
with damages and prayer for preliminary
injunction. Named respondents were the newlyelected officers and directors of the Rural Bank.

While the assignment may be valid and binding

on the petitioners and private respondents, it
does not necessarily make the transfer effective.
Consequently, the petitioners, as mere assignees,
cannot enjoy the status of a stockholder, cannot
vote nor be voted for, and will not be entitled to
dividends, insofar as the assigned shares are
concerned.
Parenthetically,
the
private
respondents cannot, as yet, be deprived of their
rights as stockholders, until and unless the issue
of ownership and transfer of the shares in
question is resolved with finality.

The SEC issued a TRO enjoining the

respondents from acting as directors and officers
of the Bank, and from performing their duties
and functions as such.
The Villanuevas application for the issuance of a
writ of preliminary injunction was denied by the
SEC Hearing Officer on the ground of lack of

--------------------------------------------------------------------------

CHEMPHIL EXPORT & IMPORT CORPORATION

(CEIC) vs. CA, JAIME Y. GONZALES, as Assignee of
BPI, RIZAL COMMERCIAL BANKING
CORPORATION (RCBC), LAND BANK OF THE
PHILIPPINES (LBP), PHILIPPINE COMMERCIAL &
INTERNATIONAL BANK (PCIB) and THE
PHILIPPINE INVESTMENT SYSTEM
ORGANIZATION (PISO)
PHILIPPINE COMMERCIAL INDUSTRIAL BANK
(AND ITS ASSIGNEE JAIME Y. GONZALES) vs. CA
and CHEMPHIL EXPORT AND IMPORT
CORPORATION (CEIC)

FACTS
Dynetics, Inc. and Antonio M. Garcia filed a
complaint for declaratory relief and/or injunction
against the consortium (PISO, BPI, LBP, PCIB
and RCBC) seeking judicial declaration,
construction and interpretation of the validity of
the surety agreement that they had entered into
with the consortium and to perpetually enjoin
them latter from collecting any purported
obligations which Dynetics and Garcia might
have undertaken in said agreement.
7 months later Dynetics, Garcia and Matrix
Management & Trading Corporation filed a
complaint for declaratory relief and/or injunction
against the Security Bank & Trust Co. The trial
court granted SBTC's prayer for the issuance of a
writ of preliminary attachment and a notice of
garnishment covering Garcia's shares in
Chemphil (including the disputed shares) was
served on Chemphil and duly annotated in their
stock and transfer books.
The consortium applied for the issuance of a writ
of preliminary attachment against Dynetics and
Garcia, which was granted. Various real and
personal properties of Dynetics and Garcia were
garnished, including the disputed shares. This
garnishment, however, was not annotated in
Chemphil's stock and transfer book. The RTC
dismissed the complaint and counterclaims. The
consortium appealed to the CA.
During its pendency Garcia and the consortium
entered into a Compromise Agreement. Garcia
was dropped as a party to the appeal leaving the
consortium to proceed solely against Dynetics,
Inc.
Garcia under a Deed of Sale transferred to Ferro
Chemicals, Inc. (FCI) the disputed shares and
other properties, stipulating that part of the
purchase price shall be paid by FCI directly to
SBTC.
FCI issued a check in favor of SBTC, which
SBTC refused claiming that the amount was not

sufficient to discharge the debt. The check was

thus consigned by Antonio Garcia and Dynetics
with the RTC as payment of their judgment debt
in the SBTC case.
FCI assigned its shares in Chemphil, which
included the disputed shares, to petitioner CEIC.
The shares were registered and recorded in the
corporate books of Chemphil in CEIC's name
and the corresponding stock certificates were
issued to it.
Meanwhile, Garcia failed to comply with the
terms of the compromise agreement. On motion
for execution, Garcia's properties were levied
including his shares in Chemphil (the disputed
shares) previously garnished.
The consortium acquired the disputed shares of
stock at the public auction sale. On same day, a
Certificate of Sale covering the disputed shares
was issued to it.
The consortium filed a motion to order the
corporate secretary of Chemphil to enter in its
stock and transfer books the sheriff's certificate
of sale and to issue new certificates of stock in
the name of the banks concerned. The trial court
granted said motion.
CEIC filed a motion to intervene in the
consortium case seeking the recall of the
abovementioned order on grounds that it is the
rightful owner of the disputed shares. Trial court
granted CEIC's motion.
The consortium filed their opposition. The trial
court denied their motions.
The consortium appealed to the CA. The CA
consolidated the cases. The CA reversed the
orders of the trial court and confirmed the
ownership of the consortium over the disputed
shares.
The consortium, with the exception of PISO,
assigned without recourse all its rights and
interests in the disputed shares to Jaime
Gonzales.
CEIC filed the instant petition for review. PCIB
filed its own petition for review.
ISSUE
Who is legally entitled to the disputed shares of
Chemphil, an attaching creditor (the consortium)
or a purchaser (FCI/CEIC)
DECISION

The SC ruled that the attachment lien acquired

by the bank consortium is valid and effective
even as against the buyer (FCI) and its assignee
(CEIC), notwithstanding the fact that said
attachment lien was not registered in the
corporate books of Chemphil. "Both the Revised
Rules of Court and the Corporation Code",
according to the Court, "do not require
annotation in the corporations stock and transfer
book for the attachment of shares of stock to be
valid and binding on the corporation and third
party." Consequently, when FCI purchased the
shares of stock from Mr. Garcia, it purchased
them subject to the attachment lien of the bank
consortium. In this regard, the High Court
explained that a preliminary attachment is a
security for the satisfaction of whatever
judgment may be obtained by the attaching
creditor in a court action, which continues until
the judgment debt is fully satisfied.
So the answer to the question is that the
attaching creditor enjoys priority to the shares of
stock.
WHEREFORE, appealed decision is hereby
AFFIRMED and the appealed decision insofar as
it adjudged the CEIC the rightful owner of the
disputed shares, is hereby REVERSED.
Moreover, for wantonly resorting to forumshopping, PCIB is hereby REPRIMANDED and
WARNED that a repetition of the same or similar
acts in the future shall be dealt with more
severely.
----------------------------------------------------------BPI vs. BPI EMPLOYEES UNION-DAVAO CHAPTERFEDERATION OF UNIONS IN BPI UNIBANK

FACTS:
In 2000, Far East Bank and Trust Company
(FEBTC) merged with Bank of the Philippine
Islands. Petitioner had a Union Shop agreement
with respondent BPI Employees Union-Davao
Chapter-Federation of Unions in BPI Unibank
(the Union).Pursuant to the merger, respondent
requested BPI to terminate the employment of
those new employees from FEBTC who did not
join the union.
BPI refused to undertake such action and
brought the controversy before a voluntary
arbitrator. Although BPI won the initial battle at
the Voluntary Arbitrator level, BPIs position was
rejected by the Court of Appeals which ruled that
the Voluntary Arbitrators interpretation of the
Union Shop Clause was at war with the spirit
and rationale why the Labor Code allows the
existence of such provision.
This was followed and affirmation by the
Supreme Court of the CA decision holding that
former employees of the Far East Bank and Trust
Company (FEBTC) "absorbed" by BPI pursuant
to the two banks merger. The absorbed

employees were covered by the Union Shop

Clause in the then existing collective bargaining
agreement (CBA)of BPI with respondent BPI
Employees Union-Davao Chapter-Federation of
Unions in BPI Unibank (the Union). Petitioners,
despite the August 2010 decision moved for a
Motion for reconsideration of the decision.
ISSUE:
Whether or not the "absorbed" FEBTC
employees fell within the definition of "new
employees" under the Union Shop Clause, such
that they may be required to join respondent
union or suffer termination upon request by the
union.
HELD:
The court agreed with Justice Brions view that it
is more in keeping with the dictates of social
justice and the State policy of according full
protection to labor to deem employment
contracts as automatically assumed by the
surviving corporation in a merger, without break
in the continuity of their employment, and even
in the absence of an express stipulation in the
articles of merger or the merger plan.
By upholding the automatic assumption of the
non-surviving corporations existing employment
contracts by the surviving corporation in a
merger, the Court strengthens judicial protection
of the right to security of tenure of employees
affected by a merger and avoid confusion
regarding the status of their various benefits.
However, it shall be noted that nothing in the
Resolution shall impair the right of an employer
to terminate the employment of the absorbed
employees for a lawful or authorized cause or the
right of such an employee to resign, retire or
otherwise sever his employment, whether before
or after the merger, subject to existing
contractual obligations.
Although by virtue of the merger BPI steps into
the shoes of FEBTC as a successor employer as
if the former had been the employer of the
latters employees from the beginning it must be
emphasized that, in reality, the legal
consequences of the merger only occur at a
specific date, i.e., upon its effectivity which is
the date of approval of the merger by the SEC.
Thus, the court observed in the Decision that BPI
and FEBTC stipulated in the Articles of Merger
that they will both continue their respective
business operations until the SEC issues the
certificate of merger and in the event no such
certificate is issued, they shall hold each other
blameless for the non-consummation of the
merger.
In other words, the obligation of BPI to pay the
salaries and benefits of the former FEBTC
employees and its right of discipline and control
over them only arose with the effectivity of the
merger. Concomitantly, the obligation of former
FEBTC employees to render service to BPI and
their right to receive benefits from the latter also
arose upon the effectivity of the merger. What is

material is that all of these legal consequences of

the merger took place during the life of an
existing and valid CBA between BPI and the
Union wherein they have mutually consented to
include a Union Shop Clause.
----------------------------------------------------------REBURIANO vs. CA

FACTS:
RTC rendered judgment in favor of Pepsi Cola
Bottling Co. ordering Reburiano to pay P55,000
with interest for the unpaid bottles of softdrinks
it received from the company. RTC issued a writ
of execution.
However, it appears that prior to the
promulgation of the decision of the trial court,
private respondent amended its AOI to shorten
its term of existence to July 8, 1983. The
amended articles of incorporation was approved
by the SEC on March 2, 1984. The trial court
was not notified of this fact.
Reburiano moved to quash the writ of execution
on the grounds that when the CA rendered its
decision, the private respondent was no longer in
existence and had no more juridical personality
and so, as such, it no longer had the capacity to
sue and be sued; and that after Pepsi lost its
existence and juridical personality, Atty.
Romualdo M. Jubay had no more client in this
case and so his appearance in this case was no
longer possible and tenable; Private respondent
opposed petitioners' motion. It argued that the
jurisdiction of the court as well as the respective
parties capacity to sue had already been
established during the initial stages of the case;
and that when the complaint was filed in 1982,
private respondent was still an existing
corporation so that the mere fact that it was
dissolved at the time the case was yet to be
resolved did not warrant the dismissal of the case
or oust the trial court of its jurisdiction. Private
respondent further claimed that its dissolution
was effected in order to transfer its assets to a
new firm of almost the same name and was thus
only for convenience.
Private respondent argues that petitioners knew
that it had ceased to exist during the course of
the trial of the case but did not act upon this
information until the judgment was about to be
enforced against them; hence, the filing of a
Motion to Quash and the present petition are
mere dilatory tactics resorted to by petitioners.
Private respondent likewise cites the ruling of
this Court in Gelano v. Court of Appeals that the
counsel of a dissolved corporation is deemed a
trustee of the same for purposes of continuing
such action or actions as may be pending at the
time of the dissolution to counter petitioners'
contention that private respondent lost its
capacity to sue and be sued long before the trial
court rendered judgment and hence execution of
such judgment could not be complied with as the
judgment creditor has ceased to exist.
RTC denied Reburianos petition to quash the
writ of execution. An appeal was made. CA

dismissed the appeal. Hence, this petition for

review on certiorari.
ISSUE:
Whether or not Pepsi still had juridical
personality to pursue its case against Reburiano
after a shortening of its corporate existence.
DECISION:
Yes. Petitioners are in error in contending that "a
dissolved and non-existing corporation could no
longer be represented by a lawyer and
concomitantly a lawyer could not appear as
counsel for a non-existing judicial person.
The only reason for their refusal to execute the
same is that there is no existing corporation to
which they are indebted.
Such argument is fallacious. The law specifically
allows a trustee to manage the affairs of the
corporation in liquidation.
Consequently, any supervening fact, such as the
dissolution of the corporation, repeal of a law, or
any other fact of similar nature would not serve
as an effective bar to the enforcement of such
right.
Ratio: Sec. 122 of the Corporation Code
provides in part:
122. Corporate Liquidation. Every
Corporation whose charter expires by its own
limitation or is annulled by forfeiture or
otherwise, or whose corporate existence for other
purposes is terminated in any other manner, shall
nevertheless be continued as a body corporate
for three (3) years after the time when it would
have been so dissolved, for the purpose of
prosecuting and defending suits by or against it
and enabling it to settle and close its affairs, to
dispose of and convey its property and to
distribute its assets, but not for the purpose of
continuing the business for which it was
established.
At any time during said three (3) years, said
corporation is authorized the empowered to
convey all of its property to trustees for the
benefit of stockholders, members, creditors, and
other persons in interest. From and after any
such conveyance by the corporation of its
property in trust for the benefit of its
stockholders, members, creditors and others in
interests, all interests which the corporation had
in the property in terminates, the legal interest
vests in the trustees, and the beneficial interest in
the stockholders, members, creditors or other
persons in interest.
Petitioners argue that while private respondent
Pepsi Cola Bottling Company of the Philippines,
Inc. undertook a voluntary dissolution on July 3,
1983 and the process of liquidation for three (3)
years thereafter, there is no showing that a
trustee or receiver was ever appointed. They
contend that 122 of the Corporation Code does
not authorize a corporation, after the three-year
liquidation period, to continue actions instituted

by it within said period of three years. Petitioners

cite the case of National Abaca and Other Fibers
Corporation v. Pore wherein this court stated: It
is generally held, that where a statue continues
the existence of a corporation for a certain period
after its dissolution for the purpose of
prosecuting and defending suits, etc., the
corporation becomes defunct upon the expiration
of such period, at least in the absence of a
provision to the contrary, so that no action can
afterwards be brought by or against it, and must
be dismissed. Actions pending by or against the
corporate when the period allowed by the statue
expires, ordinarily abate.
This ruling, however, has been modified by
subsequent cases. In Board of Liquidators v.
Kalaw, this Court stated:
. . . The legal interest became vested in the
trustee the Board of Liquidators. The
beneficial interest remained with the sole
stockholder the government. At no time had
the government withdrawn the property, or the
authority to continue the present suit, from the
Board of Liquidators. If for this reason alone, we
cannot stay the hand of the Board of Liquidators
from prosecuting this case to its final conclusion.
The provision of Section 78 (now Section 122)
of the Corporation Law the third method of
winding up corporate affairs finds application.
Indeed, in Gelano vs. CA, a case having
substantially similar facts as the instant case, this
Court held: However, a corporation that has a
pending action and which cannot be terminated
within the three-year period after its dissolution
is authorized under Sec. 78 [now 122] of the
Corporation Law to convey all its property to
trustees to enable it to prosecute and defend suits
by or against the corporation beyond the threeyear period. Although private respondent did not
appoint any trustee, yet the counsel who
prosecuted and defended the interest of the
corporation in the instant case and who in fact
appeared in behalf of the may be considered a
trustee of the corporation at least with respect to
the matter in litigation only. Said counsel had
been handling the case when the same was
pending before the trial court until it was
appealed before the Court of Appeals and finally
to this Court. We therefore hold that there was
substantial compliance with Sec. 78 [now 122]
of the Corporation Law and such private
respondent Insular Sawmill, Inc. could still
continue prosecuting the present case even
beyond the period of three (3) years from the
time of dissolution.
. . . [T]he trustee may commence a suit which
can proceed to final judgment even beyond the
three-year period. No reason can be conceived
why a suit already commenced by the
corporation itself during its existence, not by a
mere trustee who, by fiction, merely continues
the legal personality of the dissolved corporation
should not be accorded similar treatment allowed
to proceed to final judgment and execution
thereof.

In the Gelano case, the counsel of the dissolved

corporation was considered a trustee. In the latter
case of Clemente v. Court of Appeals, we held
that the board of directors may be permitted to
complete the corporate liquidation by continuing
as "trustees" by legal implication. For, indeed, as
early as 1939, in the case of Sumera v. Valencia,
this Court held: It is to be noted that the time
during which the corporation, through its own
officers, may conduct the liquidation of its assets
and sue and be sued as a corporation is limited to
three years from the time the period of
dissolution commences: but there is no time limit
within which the trustees must complete a
liquidation placed in their hands. It is provided
only (Corp. Law, Sec. 78 [now Sec. 122]) that
the conveyance to the trustees must be made
within the three-year period. It may be found
impossible to complete the work of liquidation
within the three-year period or to reduce
disputed claims to judgment. The authorities are
to the effect that suits by or against a corporation
abate when it ceased to be an entity capable of
suing or being sued; but trustees to whom the
corporate assets have been conveyed pursuant to
the authority of Sec. 78 [now Sec. 122] may sue
and be sued as such in all matters connected with
the liquidation. . . .
Furthermore, the Corporation Law provides:
145. Amendment or repeal. No right or
remedy in favor of or against any corporation, its
stockholders, members, directors, trustees, or
officers, nor any liability incurred by any such
corporation, stockholders, members, directors,
trustees, or officers, shall be removed or
impaired either by the subsequent dissolution of
said corporation or by any subsequent
amendment or repeal of this Code or of any part
thereof.
This provision safeguards the rights of a
corporation which is dissolved pending
litigation.
Other issues:
Petitioners anchored their Motion to Quash on
the claim that there was a change in the situation
of the parties. However, a perusal of the cases
which have recognized such a ground as an
exception to the general rule shows that the
change contemplated by such exception is one
which occurred subsequent to the judgment of
the trial court. Here, the change in the status of
private respondent took place in 1983, when it
was dissolved, during the pendecy of its case in
the trial court.
The change occurred prior to the rendition of
judgment by the trial court.
Rules of fair play, justice, and due process
dictate that parties cannot raise for the first time
on appeal from a denial of a Motion to Quash a
Writ of Execution issues which they could have
raised but never did during the trial and even on
appeal from the decision of the trial court.
-----------------------------------------------------------

B. VAN ZUIDEN vs. GTVL

FACTS:
Petitioner, a corporation incorporated under the
laws of Hong Kong, is engaged in the
importation and exportation of several products,
including lace products.
On several occasions, respondent
purchased lace products from them.

GTVL

The procedure for these purchases, as per the

instructions of respondent, was that petitioner
delivers the products to Kenzar Ltd., a HK corp.,
and the products are then considered as sold,
upon receipt, and respondent became obligated
to pay the agreed purchase price.
However, commencing October 31, 1994
respondent has failed and refused to pay the
agreed purchase price for several deliveries in
spite of demands and in spite of promises to pay
and/or admissions of liability.
Petitioner filed a complaint for sum of money
against respondent.
Respondent filed a Motion to Dismiss on the
ground that petitioner has no legal capacity to
sue, alleging that petitioner is doing business in
the Philippines without license.
Trial court dismissed the complaint. On appeal,
the CA sustained the dismissal. Hence, this
petition.
DECISION:
The petition is meritorious.
Section 133 of the Corporation Code provides:
Doing business without license. No foreign
corporation transacting business in the
Philippines without a license, or its successors or
assigns, shall be permitted to maintain or
intervene in any action, suit or proceeding in any
court or administrative agency of the Philippines;
but such corporation may be sued or proceeded
against before Philippine courts or administrative
tribunals on any valid cause of action recognized
under Philippine laws.
The law is clear. An unlicensed foreign
corporation doing business in the Philippines
cannot sue before Philippine courts. On the other
hand, an unlicensed foreign corporation not
doing business in the Philippines can sue before
Philippine courts.
Under Section 3(d) of Republic Act No. 7042
(RA 7042) or The Foreign Investments Act of
1991, the phrase doing business includes:

x x x soliciting orders, service contracts, opening

offices, whether called liaison offices or
branches;
appointing
representatives
or
distributors domiciled in the Philippines or who
in any calendar year stay in the country for a
period or periods totalling one hundred eighty
(180) days or more; participating in the
management, supervision or control of any
domestic business, firm, entity or corporation in
the Philippines; and any other act or acts that
imply a continuity of commercial dealings or
arrangements, and contemplate to that extent the
performance of acts or works, or the exercise of
some of the functions normally incident to, and
in progressive prosecution of, commercial gain
or of the purpose and object of the business
organization: Provided, however, That the phrase
doing business shall not be deemed to include
mere investment as a shareholder by a foreign
entity in domestic corporations duly registered to
do business, and/or the exercise of rights as such
investor; nor having a nominee director or officer
to represent its interests in such corporation; nor
appointing a representative or distributor
domiciled in the Philippines which transacts
business in its own name and for its own
account.
The series of transactions between petitioner and
respondent cannot be classified as doing business
in the Philippines under Section 3(d) of RA
7042. An essential condition to be considered as
doing business in the Philippines is the actual
performance of specific commercial acts within
the territory of the Philippines for the plain
reason that the Philippines has no jurisdiction
over commercial acts performed in foreign
territories. Here, there is no showing that
petitioner performed within the Philippine
territory the specific acts of doing business
mentioned in Section 3(d) of RA 7042. Petitioner
did not also open an office here in the
Philippines, appoint a representative or
distributor, or manage, supervise or control a
local business. While petitioner and respondent
entered into a series of transactions implying a
continuity of commercial dealings, the perfection
and consummation of these transactions were
done outside the Philippines.
We also find no single activity which petitioner
performed here in the Philippines pursuant to its
purpose and object as a business organization.
Moreover, petitioners desire to do business
within the Philippines is not discernible from the
allegations of the complaint or from its
attachments. Therefore, there is no basis for
ruling that petitioner is doing business in the
Philippines.
An exporter in one country may export its
products to many foreign importing countries
without performing in the importing countries
specific commercial acts that would constitute
doing business in the importing countries. The
mere act of exporting from ones own country,
without doing any specific commercial act
within the territory of the importing country,

cannot be deemed as doing business in the

importing country. The importing country does
not acquire jurisdiction over the foreign exporter
who has not performed any specific commercial
act within the territory of the importing country.

Without jurisdiction over the foreign exporter,

the importing country cannot compel the foreign
exporter to secure a license to do business in the
importing country.